Inside Information and Quarterly Financial Statements: CNMV Communication of 13 October 2021

As is logical, the abolition of the obligation to publish quarterly financial reports for issuers of securities traded on regulated markets with the repeal of Article 120(4) of the Securities Market Act by Act 5/2021, with effect from 3 May this year, does not affect the insider trading rules under the Market Abuse Regulation. As noted by the Spanish Securities Market Authority (“CNMV”) in a communication dated 20 April, as of 3 May issuers may continue to publish quarterly information on a voluntary basis but, as it is not regulated information on issuers, they will no longer be able to do so through the procedure in the CNMV’s gateway (“IPP”), but rather as “Other Relevant Information”, or, if appropriate, report it as “Inside Information”. In this communication dated 13 October, the supervisor clarifies that although there is no longer an obligation for issuers to publish quarterly information, if they do so voluntarily, in accordance with Article 7 of the Market Abuse Regulation (“MAR”), the quarterly financial statements may contain inside information in certain cases.

Although Article 19(11) of the Regulation prohibits persons discharging managerial responsibilities within an issuer from trading in shares, debt instruments or derivatives in the 30 calendar days before the announcement of an interim financial report or a year-end report, this ‘closed period’ does not apply in cases where the issuer voluntarily publishes the quarterly financial report. But one thing is the legislation on closed periods not applying in this case, and quite another is the impossibility of inside information being inferred from these quarterly financial statements. Hence the CNMV specifies in its communication of 13 October that all persons who are aware of said information, regardless of whether or not they are persons with managerial responsibilities, must refrain from trading in the security in question while the information is not public, in accordance with the ban on insider trading under Article 14 MAR.